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The value-based investor's bid and asked price is _____ Treynor Model. a. smaller than inside spread...

The value-based investor's bid and asked price is _____ Treynor Model.

a. smaller than inside spread in

b. irrelevant to

c. determined within

d. given in

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Answer #1

Ans: The value based investor's bid and asked price is determined with in Treynor Model

Option c is correct.

According to Treynor Dealer model The value based transactor's price which is called as outside spread is much larger than inside spread.

it is not smaller than inside spread.

We have to calculate the bid ask price spread in this model, comparing dealer's inside spread and value based transactor's outside spread for generating market making position.

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